Russia made history last week. With the inauguration of President Vladimir Putin, that country marked its first truly democratic transition of leaders in over a millennium. It was a remarkable moment for the nation, as well as for the once-obscure former KGB functionary who took the oath of office as president. Mr. Putin inherits a nation in search of itself, an economy on the ropes and the world’s second-largest nuclear arsenal. It is a dangerous combination.
Mr. Putin’s first words were soothing. In his acceptance speech, he stressed that he sought stability and pledged to unite his nation and its people. There would be no quick miracles, but he assured the world that his government would be professional and efficient.
To buttress that declaration, he appointed Mr. Mikhail Kasyanov, a well-respected former finance minister, economist and debt negotiator, as prime minister. Mr. Putin’s solid grip on the Duma, the Russian Parliament, means that confirmation of Mr. Kasyanov is a certainty.
Mr. Kasyanov has his work cut out for him, but the Russian economy is in better shape than its reputation would suggest. There has been considerable progress since it almost melted down in 1998. The country’s biggest export is oil, and the climb in petroleum prices has boosted export revenues. Inflation is 11.4 percent this year, down from 36.3 percent a year ago. Tax reform and the oil earnings have helped push the federal budget into surplus.
But Russia’s recovery is precarious. Much of the turn in fortunes is attributable to the oil-price spike. The economy is still too dependent on natural resources, and consumer demand is weak. Corruption must be tackled, the grip of the “oligarchs” — the tycoons who control vast chunks of the national economy — weakened, and the rule of law strengthened.
While Mr. Kasyanov may well be the man to get the economy back on its feet, it is still a daunting assignment. The government has said that it will unveil its economic program at the end of the month. The new prime minister has said that he will pursue further liberalization and yet more tax reform. That is what the International Monetary Fund will want to hear. The IMF continues negotiations for a new loan program with the government this week.
Unfortunately, Mr. Kasyanov is the second man on the ladder in Moscow. He may enjoy the confidence of the IMF, but his boss has to make the tough decisions. The most important one will be ending the reign of the oligarchs. Despite his assurances that he will level the playing field and clean up the nation’s politics, the first signs are not promising.
Last week, security officials raided the offices of the country’s leading independent media organization. Government officials offered contradictory explanations for the raid, but the most compelling argument was that it was retaliation for the news organization’s criticism of the war in Chechnya. Mr. Putin has little tolerance for contrary views; the raid suggests that his conception of national unity offers little room for dissent. That is not what Russia’s young democracy needs right now.
Nor does Russia need another military quagmire. Mr. Putin has vigorously prosecuted the war in Chechnya. His aggressive policies propelled him into the presidency, and he has shown little inclination to let up. That is a mistake. Russian troops are in command now — having leveled the major population centers in the Chechen republic and forced hundreds of thousands of people from their homes. But the rebels have vowed to wage a guerrilla war, and Russian casualties are mounting. The human-rights violations that occurred during the war have complicated relations with Europe and ensured the rise of a generation of Central Asians implacably hostile to Moscow. Mr. Putin would do well to declare victory and get out, before he suffers the fate of his Soviet predecessors in Afghanistan.
Mr. Putin’s full-throated nationalism appeals to many Russians, who yearn for the security and status of the old days. That does not mean they would like to see the old order return, but the new president’s tough talk strikes a chord. But a real nationalist would put the country’s interests first. This means ending the war, cleaning up the economy and providing the Russian people with a better standard of living. Better relations with Russia’s major diplomatic and economic partners are essential parts of that package. If Mr. Putin is sincere in his desire to make a new start, he will find that governments in Tokyo, Washington and Europe are ready to work with him.
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